Lenders under fire over swap rate actions
A number of lenders have been criticised for acting swiftly to deal with an increase in swap rates, while taking no action when swap rates fall.
Bank of Ireland has withdrawn a number of products following upwards swap rate movement, while Northern Rock has placed its products on withdrawal alert.
Peter O’Donovan, mortgage manager at Bestinvest, said: “When swap rates go down lenders are slow to act but as soon as they go up they are very quick in making changes.”
However, Ron Stout, media relations manager at Northern Rock, said the lender provided plenty of notice about any changes made to product rates as a result of swap rate movement, with alerts common practice by the lender. “We placed a number of our products on withdrawal notice on Friday 3 February for our flexible and stepped flexible rates as a result of possible swap rate movement. We have also warned people that from 14 February we will be increasing the flexible fixed rate products by 0.1 per cent on our two and three-year fixed rates over 85 per cent LTV. This tier of products will undergo changes.”
Tiffany Hardie-Evans, media relation’s manager at Bank of Ireland, said swap rate movement dictated any product changes. “We withdrew the standard fee saver two and three-year products and the 4.89 per cent two-year fixed easy switch. The three-year fixed easy switch was also withdrawn as a result of swap rate movement.”